This article talks about Greenspans expert opinion. He basically says, that if the U.S. gov't does not act to cut back the current huge budget deficit, the US economy could go into a severe downturn.

What just happened less than a week a later? Congress acted to create more tax cuts therefore doing the opposite of what Greenspan advised (further increasing the budget deficit).

To add more fuel to the fire - the U.S. labor force is slowly lagging behind when compared to education level and qualifications of populations in Asia and Europe. This means unless we get our act together (educationally speaking) we will not be as competitive.

Considering that the dollar is getting weaker and weaker and the budget deficit is growing - foreign investors could lose faith in their US Treasury securities and sell them off like hot cakes at the first sign of the dollar's fall. This could send the U.S. economy into a tailspin.

I have a feeling this IS what is going to happen.

What say you? Does the U.S. have a chance?

toughtrio

People start showing fake stats and reports for any one whom they seem to think is starting to grow. Dont worry, nothing will happen.

S3nd K3ys

Nearly every indicator I've seen shows progress in the US economy. Well,
except for the Bushhaters. Unemployement continues to stay at record lows.
GDP is at very strong highs. Profit margins are way up. Stock markets are
up. Outside countries continue to invest money into this economy as it
continues to be one of the strongest economies in the world.

All this dispite the record deficit (that is proportionally not nearly as dramatic
as the Bushhaters would have you believe), and the other events that should
have, by all rights, put us into a recession.

But it's ok, if the Bushhaters keep saying it loud enough and long enough,
the people will start believing it. Like they've been doing by saying
unemployment is high, the dollar is weak, and this is the worst economy since
Herbert Hoover.

earthchild

in case you were trying to lump me in with the 'bushhaters' ... please don't. I don't hate bush.

all of the information I posted above is from economists either in the Federal gov't or at institutions like MIT.

and then of course there is my professor - who is just an average economics joe.

but if you know anything about economics you also know that any economy goes through business cycles. There are always peaks and always troughs. Right know we are heading towards a peak.

That is right S3nd the economy is strong right now, but there is always going to be a downturn - and the point that those untrained in economics fail to understand, is that if you don't stay on top of certain economic variables (such as a deficit the size of texas and a weak dollar against a steadily strengthening Euro) things could go crashing down instead of slowly settling down.

For example, if the world loses faith in the U.S. dollar because it continues to lose value...

(pay attention here)... they could dump their dollars. (in fact people in other countries have already started to do this.) When dumping accelerated we would have rapid inflation. Right now we already do have inflation. That is why the FED continues to raise the discount rate. see below they just raised it for the 13th time yesterday

Now I'm not an almighty punishing God - what I say doesn't automatically go. I'm just trying to point some things out for anyone who is ready to listen.

(consequently it has nothing to do with politics at this point - it is just like a mathematical or statistical equation.)

S3nd K3ys

Quote:

That is right S3nd the economy is strong right now, but there is always going to be a downturn

So why make a post making it sound like it's not normal?

earthchild

beacuse the huge deficit, and a struggling (I'm changing that from weak to struggling to be fair) dollar...

...are like weak foundations under a rising tower. those particular factors aren't normal. (and I haven't even mentioned the record trade deficit.) what is normal is an economy that moves steadily between peaks and troughs - what isn't normal is fueling growth unwisely so as to create a false sense of growth that may result in a crash of the economy (meaning a much deeper and wider trough a.k.a deeper, wider, recession)

these are just facts - they are not guarantees of a deep recession, they are just factors leading up to said possibility.

My main point is this:If the deficits are not dealt with soon - we will be setting ourselves up for a fall.

LumberJack

Actually, you can sum up your crisis in two points....

1. Your country is being run by the dumbest republican in history

2. Alan Greenspans term is ending in January and everyone in business world is nervous....

atomictoyz

LumberJack wrote:

Actually, you can sum up your crisis in two points....

1. Your country is being run by the dumbest republican in history

2. Alan Greenspans term is ending in January and everyone in business world is nervous....

and it's the end of the years.

I wouldn't say Bush is the dumbest Republican though and alot of our financial woes are compounded by natural disasters and things like NAFTA and WTO and unnatural disaters like 9-11-2001. But also, the president doesn't really have that much to do with the economy. Too much of our economy is based upon a gambling systems called the stock market where a single paranoid move can cause a billion dollar tumble in a blink.

It is a huge problem. But it cannot be fixed unless politicians get a new brain. Either you get taxed senseless to support people who don't work or you get taxed senseless to pay for weapons of mass destruction. Too much of one or the other has led us to where we are.

Too much Reaganomics (rich people hording) mixed with too much Clintonomics (stealing from the rich to pay the non working) creates a viscious spin cycle.